Agency’s UK managing director and head of marketing speak of their optimism as the company rebuilds. Robin Searle reports.
Like many travel companies, the Flight Centre of September 2022 is radically different to the one that entered 2020 with coronavirus barely registering in the public consciousness.
Yet despite an unprecedented period that saw a huge reduction in headcount and retail presence, there can be few firms more bullish emerging from the pandemic than the Australian-head-quartered long-haul specialist.
In isolation, the bare numbers of the current UK business paint a stark picture – 12 shops compared with around 80 pre-pandemic, and 165 leisure sales staff compared with 550 in early 2020.
But with strategic plans in place in both areas, the team leading the company’s UK business insist the current direction of travel is actually not dissimilar to one envisaged prior to Covid-19, with the global shutdown of the industry also having a silver lining in the opportunity to accelerate company-wide efficiencies.
More: Flight Centre to rebuild retail network after Covid closures
“Like all businesses, we had to do a lot of restructuring and we had to do it at pace to release investment we very quickly raised for both our leisure and corporate side,” explains Liz Mathews, UK managing director.
“We were already looking at enhancements to our systems and had a five-year plan to reduce our shop network to about 30 or 40. That was obviously accelerated as the global business needed to reduce its cost base by around two-thirds, but the investment that followed allowed us to come out of the pandemic stronger than a lot of competitors.”
Yvonne Hobden, head of marketing, adds: “The pandemic was horrific but it made everyone assess the make-up of the business and ensure it was future-proof. It was an incredibly difficult period but it undoubtedly made us stronger.”
New technology
Changes made in the past two years include the introduction of new global sales systems in November 2020 – with an original two-year rollout reduced to six months. CRM systems are also due to be upgraded in November, with Mathews confident the company will boast “market-leading technology” in a year’s time as it also develops its e-commerce capabilities.
Acquisitions have strengthened the agency’s hand further, Mathews says, with Dubai-based NDC specialist TPConnects likely to be increasingly important in securing the broadest access to airfares.
Meanwhile, the company is pursuing a revised strategic plan to gradually restore its retail footprint to around 25 or 30 stores and is recruiting to fill both sales and support positions.
“No industry would wish the past two years on themselves but we took the best from it and laid the foundations for our future growth and success,” Mathews says.
“We returned to profitability in March and even though sales are somewhat constrained as we rebuild resources and are not back to 2019 levels, we are considerably more profitable now than we were in 2019.”
Mathews explains that Flight Centre took the decision to maintain three key teams during the pandemic, with experts in first and business-class bookings, complex air itineraries and groups largely retained.
The company also introduced a homeworking division, which allowed it to retain regional talent and support the teams in its remaining stores and offices.
“These decisions paid off as we were able to retain as many top people as we could and it allowed us to be in a strong position to respond when things restarted,” she says.
Recruitment
The development of the homeworking division will continue as the company targets a 220-strong sales team by the end of the year and ultimately a team in the region of 300.
Meanwhile, a number of former staff, referred to as “alumni”, are being brought back on board as its retail presence grows.
“The legacy network meant we had multiple shops in some locations, so it was always in our plan to slim that down,” Mathews explains. “We want to be in one great location in key towns and cities, and we are actively looking for new sites, mostly in London and the southeast.”
Stores are also reopening on previous sites, including in Ealing, west London, and in Bath, with more openings planned for the first half of 2023.
“Ultimately we will be at around 25 to 30 stores, so not far off what we identified pre-pandemic,” she adds.
Key to the rebuilding process will be recruiting the best staff, Hobden says, with alumni returning alongside new talent.
The workforce has been increased by around a third in the past year by re-recruiting, and both Hobden and Mathews speak of their “pride” at the number of former staff looking to return.
“We are seeing significant productivity gains, with turnover per consultant more than double pre pandemic levels, which we are attributing both to talent and the benefits of the new systems,” Mathews says.
“The average novice is achieving in their first three months what an average member of staff was achieving pre-pandemic and I’ve been really impressed with the standards of the new recruits.”
Hobden says the company ensured selling staff were supported throughout the pandemic, with additional payments supplementing the loss of commission earnings.
“We wanted to ensure we looked after our people,” she adds. “We also understand the pressures everyone is under currently so we have also reviewed our basic salaries to ensure we are competitive.”
Operation Floodgate
The company’s ability to expand is largely driven by the strength of therebound, particularly for premium product, with its affluent customer base more insulated from living cost pressures than other demographics.
During the pandemic, a number of scenarios were modelled, but demand outstripped even the most optimistic scenario, dubbed by Hobden ‘Operation Floodgate’.
“We needed to be ready regardless of the scenario,” Mathews says. “If leisure outstripped corporate, we were ready to repurpose corporate staff in leisure roles, but ultimately we saw both emerge incredibly strongly.”
The total number of staff across corporate and leisure divisions currently stands at 850, compared with almost 1,700 prior to the pandemic.
In addition to rebuilding resources, the company has had to understand and respond to changing behaviours, while staying true to its core specialisms of long-haul tailor-made and flight-only, including VFR (visiting friends and relations) traffic.
It also continues to supply operators on an Atol-to-Atol basis, and has launched a major brand campaign, including its first TV adverts.
“We saw our Trustpilot scores rise after the pandemic, which was a great endorsement from our existing customers,” says Hobden. “Now we are able to target new business and that demand has allowed us to tip the balance to brand rather than performance marketing.
“Ultimately we aim to be omnichannel. We want all channels to be aligned and consistent, and at the heart of that will always be our people.”